Beer Makers Who Used Other Breweries Are Opening Their Own

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Joe and Lauren Grimm, spouses and founders of Grimm Artisanal Ales, with their new brewing equipment at the brewery and taproom in Williamsburg, Brooklyn, which they hope to open in September.CreditBrian Harkin for The New York Times

By Joshua M. Bernstein

July 17, 2017

Chris Lohring surveyed America’s beer scene in 2010 and decided to play the contrarian. Rather than mimic the popular and potent stouts and India pale ales, he would specialize in low-alcohol, high-taste “session beers,” as he called them.

To lenders, though, the business plan held as much appeal as flat beer. So Mr. Lohring kept costs low by using established breweries in Maine, Massachusetts and Connecticut to produce and package crisp pilsners and rustic farmhouse ales under his Notch Brewing label.

Contract brewing, as it is known, was perfect for a start-up like his, requiring no expensive infrastructure. “There’s nothing riskier than building a plant before the brand and the beers have been proven,” said Mr. Lohring, who in 1993 helped found Tremont Brewery in Boston.

Craft brewing’s decade-long global surge has been partly fueled by contract, or “gypsy,” brewers, rootless beer makers whose recipes are realized on other breweries’ equipment. Early trendsetters like Evil Twin Brewing and Mikkeller of Copenhagen and Stillwater Artisanal of Baltimore built themselves into international brands through sales in bars, supermarkets and beer stores.

But now, consumers are increasingly seeking beer at the source: Since 2010, sales at breweries and brew pubs have risen more than 500 percent, according to the Alcohol and Tobacco Tax and Trade Bureau. Beer lovers routinely troop to breweries for releases of cans and bottles, and a sense of belonging to a particular place has become as important as the beer itself.

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Awoogah I.P.A. by Grimm Artisanal Ales. The company started planning to open a brewery in Brooklyn after a 2014 law change allowed taproom sales, a necessary income source for independent breweries.CreditBrian Harkin for The New York Times

That places contract brewers in a pickle. “If you don’t have a brewery, you’re kind of homeless,” said Mikkel Borg Bjergso, Mikkeller’s founder and chief executive. “You don’t have anything to show people.”

As a result, many itinerant beer makers are dropping anchor, opening breweries with tasting rooms for thirsty patrons.

Evil Twin, in Queens, and Grimm Artisanal Ales, in Brooklyn, are building breweries and taprooms. Stillwater aims to start its own beer production plant next spring in Greenpoint, Brooklyn. In June, Almanac Beer Company revealed plans to construct a brewery and taproom in Alameda, Calif., near Oakland.

And this month, Mr. Bjergso announced that he would create a brewery at Citi Field, home of the New York Mets. Scheduled to open this year, Mikkeller Brewing NYC will brew and can beers like its Say Hey Sally pilsner, served alongside food from Fuku and Pat LaFrieda. “Next year at Citi Field, people will be drinking beer made at the ballpark,” said Jim Raras Jr., Mikkeller NYC’s executive vice president.

Notch Brewing’s session beers eventually found their niche, and last summer, Mr. Lohring converted a riverside warehouse in Salem, Mass., into a brewery, taproom and beer garden. In the afternoons, customers clink glass steins of corn-laced lagers and smoked beers that are produced on the premises.

“Say you’re sitting there as a contract brewer, and you’ve got a million bucks,” Mr. Lohring said. “Do you spend the old-fashioned way with advertising and marketing, or do you spend a million bucks on a facility where you serve beer to consumers? It’s a pretty easy decision.”

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Chris Lohring, owner of Notch Brewing, at his brewery, taproom and beer garden in Salem, Mass. He opened the brewery after six years of “contract brewing.”CreditGretchen Ertl for The New York Times

Taprooms also serve as consumer focus groups. Mr. Lohring uses his to test richly flavored Old World lagers and pale ales featuring new hop varieties. “We get immediate feedback from customers and sales,” he said, “and that informs us on our next steps.”

Even more traditional brewers are planting roots. In February, the 127-year-old Narragansett Brewing Company, which once produced New England’s top-selling beer (and one of its catchiest slogans: “Hi, neighbor! Have a ’Gansett”), resumed brewing in Rhode Island for the first time in decades.

The beer was discontinued in 1983, but Mark Hellendrung, a former president of Nantucket Nectars, bought the brand rights in 2005 and soon began contract-brewing its landmark lager in Rochester. Last year, he moved the company into the cooperative Isle Brewers Guild in Pawtucket, R.I., and, in February, started making smaller batch beers like It’s About Time I.P.A.

Previously, fans passing through Rhode Island could visit only the brand’s headquarters, then in Providence. Now Mr. Hellendrung can meet fans at the brewery, as he did recently with a North Carolina couple who stopped by while driving to Maine. “We were able to sit down and have a beer,” he said. “It was just awesome to have a great conversation.”

All the same, many of these beer companies still outsource much of their brewing.

Narragansett makes most of its beer, including its lager, in Rochester, at North American Breweries, which also produces Genesee beer. That brewery’s mix of lager-making expertise, speed and economies of scale is hard to beat, Mr. Hellendrung said, noting that the Rochester brewery can make 1,200 to 1,400 cans a minute, compared with 240 in Pawtucket.

Customers at Notch Brewing serve as contact focus groups, where Mr. Lohring can test new brews and get immediate feedback in the taproom and beer garden.CreditGretchen Ertl for The New York Times

But that can exact a cost, in dollars and freshness, when you factor in tariffs, shipping costs and delivery times. So last year, Mr. Bjergso took over an existing brewery and taproom in California to create Mikkeller Brewing San Diego.

“It’s great to produce an I.P.A. and serve it to customers within a week or two weeks instead of two months,” Mr. Bjergso said. He can better adapt to fickle consumer tastes by making and selling popular I.P.A.s directly from the brewery. “You’re able to give the customers a better experience if you’re behind everything, instead of going to a supermarket or some random bar,” Mr. Bjergso said. (Mikkeller and the other brewers still sell most of their beers in bars and stores.)

Joe and Lauren Grimm, home brewers in Gowanus, Brooklyn, always wanted to build a hometown brewery. But a state law barred brewers from selling their wares on the premises — an essential source of revenue for many small brewers faced with high rents. So in 2013, the married couple started traveling as far afield as Massachusetts and Virginia to produce juicy I.P.A.s and hopped sour beers with their Grimm Artisanal Ales label.

“Half the month we’re not in Brooklyn,” Ms. Grimm said.

Though Grimm has grown into a popular Brooklyn brand, there is still a stigma attached to beer not brewed under its own roof. “Every time you drink a beer brewed under a contract basis, there’s an asterisk,” Mr. Grimm said.

His wife added, “A lot of people come up to me and say, ‘Wow, the quality and consistency in your beers is amazing, even though you’re gypsy brewing.’”

A 2014 change in the law permitted taproom sales, and the Grimms are building a brewery in a former garage in East Williamsburg that they hope will start producing beer in August and serving it in September. The Grimms will bring most of their brewing in-house, aging sour ales in large oak foudres and fermenting beers with microbes captured in their backyard.

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Beer cans from Notch contain low-alcohol, high-taste “session beers” that are made on the premises.CreditGretchen Ertl for The New York Times

Creative freedom like that is possible only when you’re calling the shots. “With gypsy brewing, I’ve always been working with one hand tied behind my back,” said Brian Strumke, who founded the nomadic Stillwater Artisanal in 2010. “There are always limitations.”

He is completing plans for a Greenpoint brewery, where he can produce beers banned at outside breweries, including ones fermented with wild yeast, which conventional brewers go to great lengths to keep out. “I couldn’t find a place that would let me can those beers, so now I’m going to build one,” Mr. Strumke said.

The Evil Twin founder Jeppe Jarnit-Bjergso (Mr. Bjergso’s identical twin) transplanted his brewing business from Copenhagen to Brooklyn about five years ago, always intending to open a local brewery.

“Some people say: ‘You’re stupid. You have the most perfect business model,’” Mr. Jarnit-Bjergso said of his contract arrangement. “I want to make Evil Twin a real New York brand.”

This summer, he hopes to start transforming a Ridgewood, Queens, banquet hall into a taproom, garden and brewery where he can indulge experimental whims and invite past brewing collaborators into his house.